According to BanklessTimes.com, Nvidia’s gaming sector is down by nearly 30%. However, the AI chipmaker covered the downturn with an incredible rise in data revenue, which has surged six-fold since its fiscal year 2023.
The site’s financial analyst, Elizabeth Kerr, comments, “The generative AI momentum is picking up, fueling the need for data centres and LLMs, resulting in aggravated demands for GPUs. Nvidia’s commitment to producing high-speed GPUs has played a part in settling these elevated demands, contributing immensely to the company’s revenue uptick.”
Nvidia’s Gaming and Data Revenue
At the start of its fiscal year 2023, Nvidia only raised $3.75 billion in revenue from its data segment. However, this figure has quickly grown, with the chipmaker making over $4.28 billion by the start of its fiscal year 2024, marking a remarkable 14% ascent.
In its Q2 FY 2024, ending July 30, 2023, Nvidia’s data centre revenue more than doubled, surpassing the $10 billion mark. Then, with the roll-out of the RTX 4060, Nvidia amassed another fortune, adding over $14 billion by the next fiscal quarter.
The set release of the new Blackwell GPUs also incited massive optimism and excitement, riling up sales in Q1 FY 2025 to $22.5 billion, its highest revenue yet from data centres’ GPU sales.
While data revenue has risen tremendously, gaming revenue saw a massive slump to roughly $2.6 billion in the first quarter of fiscal 2025 from $3.4 billion in Q1 FY 2023, culminating in a 26% drop.
Why is Nvidia’s Gaming Revenue on a Downturn?
Nvidia and other chipmakers are grappling with shifts in consumer behavior following a pandemic-fueled boom. With the end of the pandemic, consumers are no longer working from home as they used to, lessening the demand for electronics, including video games.
Moreover, with high inflation and escalated interest rates plaguing the public, many have opted to cut back on spending, bringing losses to companies like Nvidia.
In August 2022, the US imposed export restrictions that sidetracked Nvidia’s new chip releases. Aiming to limit GPU sales to China, these rules led Nvidia to lose nearly $400 million due to the market flop of the A800 and H800 series. The RTX 4090 series also faced a ban after revelations emerged about its high-end GPUs being repurposed.
Towards the end of 2023, Nvidia launched a modified version of an advanced gaming chip designed to comply with U.S. export controls: the GeForce RTX 4090 D, which marked the first sale to China after the ban.
